Tying and Bundling Practices Under Turkish Competition Law

Introduction

Tying and bundling practices are among the most significant exclusionary conduct issues under Turkish Competition Law. These practices occur when an undertaking links the sale, use or commercial availability of one product or service to another product or service. In some cases, tying and bundling can be efficient and pro-consumer. They may reduce transaction costs, improve product quality, create technical integration, offer discounts, enhance user experience or allow companies to provide innovative product packages.

However, tying and bundling may also restrict competition when used by a dominant undertaking to leverage market power from one market into another. If customers who want a dominant product are forced to take another product, competitors in the tied product market may lose access to customers. Over time, this may reduce consumer choice, weaken innovation, increase entry barriers and protect the dominant undertaking’s ecosystem.

The main legal framework is Law No. 4054 on the Protection of Competition. Article 4 prohibits agreements and concerted practices that restrict competition, while Article 6 prohibits abuse of dominant position. Tying is expressly referenced in Article 4 as requiring the purchase of other goods or services together with a good or service, contrary to the nature of the agreement or commercial practice. Article 6 also captures tying and bundling when used abusively by a dominant undertaking.

1. What Is Tying?

Tying occurs when the purchase, licensing, use or commercial availability of one product is made conditional on the purchase or use of another product. The first product is usually called the tying product, and the second product is the tied product.

For example, a dominant software provider may license an operating system only if the customer also installs a specific browser. A platform may allow sellers to access its marketplace only if they use its payment service. A medical device supplier may sell equipment only if the buyer also purchases consumables from the same supplier. A digital app store may allow app distribution only if developers use the platform’s in-app payment system.

Tying may be contractual, technical or economic. Contractual tying appears directly in the agreement. Technical tying occurs through product design or technological integration. Economic tying may occur where separate purchase is formally possible, but the terms make separate purchase commercially unrealistic.

2. What Is Bundling?

Bundling occurs when two or more products or services are offered together as a package. Bundling may be pure bundling or mixed bundling.

In pure bundling, products are available only as a package. Customers cannot purchase them separately. In mixed bundling, products are available separately, but the package is offered at a discount or under more favorable conditions.

Bundling can be efficient. Consumers may prefer one integrated package instead of several separate products. A telecom operator may bundle internet, TV and mobile services. A software company may bundle cloud storage, email and office applications. A platform may bundle logistics, payment and advertising tools. However, bundling may become anti-competitive if a dominant company uses its strong product to force adoption of a weaker product and thereby forecloses competitors.

3. Article 4 and Tying in Agreements

Article 4 of Law No. 4054 applies to agreements, concerted practices and decisions of associations of undertakings. It may be relevant where tying or bundling arises from a vertical agreement, distribution agreement, franchise system, platform contract, dealership arrangement or association decision. The law expressly refers to requiring the purchase of other goods or services together with a good or service, or tying a demanded good or service to the display of another good or service, where this is contrary to the nature of the agreement or commercial practices.

This means that tying is not only a unilateral dominance issue. Even where dominance is absent, a tying clause may still be examined under Article 4 if it restricts competition through agreement. For example, a distribution contract requiring dealers to purchase unrelated products may raise Article 4 concerns if it restricts dealer freedom, forecloses rival suppliers or distorts competition in the tied product market.

Where an Article 4 issue exists, the parties may consider whether the agreement qualifies for exemption under Article 5. Article 5 allows exemption where the agreement contributes to economic or technical development, benefits consumers, does not eliminate competition in a significant part of the market and does not restrict competition more than necessary.

4. Article 6 and Abuse of Dominance

Most serious tying and bundling cases are assessed under Article 6, because the key concern is the leveraging of dominance. A dominant undertaking may use its power in one market to restrict competition in another market by tying or bundling products together.

Article 6 prohibits abuse by dominant undertakings and includes examples such as preventing competitors from entering the market, complicating competitors’ activities, discriminating between equivalent purchasers, making purchase of one good conditional on another, and leveraging dominance in one market into another market.

A tying or bundling practice is not abusive merely because a company is large or because products are sold together. The legal analysis generally examines whether there are separate products, whether customers are forced or induced to take them together, whether the undertaking is dominant in the tying product market, whether the practice forecloses competition in the tied product market, whether consumer harm is likely and whether there is objective justification.

5. The Google Android Example in Turkey

The Turkish Competition Board’s Google Android decision is one of the most important Turkish examples of tying analysis in digital markets. The Authority’s English competition bulletin explains that the Board examined Google’s Mobile Application Distribution Agreement under tying provisions and applied a six-stage test: whether there were two separate products, whether they were bundled together, whether the undertaking was dominant in the tying product market, whether there were actual or potential foreclosure effects in the tied product market, whether consumer harm existed, and whether the practice had justifiable grounds.

The decision concerned obligations requiring device manufacturers using Android-related services to pre-install Google Search and the Google search widget and to make Google Search the default at access points to mobile search services. The Board found that the Android-related product, mobile search services and mobile internet browsers were separate products or services, and that bundling existed because manufacturers wishing to use the tying product had to pre-install Google’s search tools and make Google Search the default.

The Board also examined foreclosure effects. It considered that default installation made it difficult for competing search services to be assigned as defaults and reduced manufacturers’ incentives to install alternative search widgets. The Board concluded that Google’s tying practices transferred dominance from the licensable mobile operating systems market into mobile internet search services and produced actual and potential foreclosure effects.

6. Separate Products Requirement

One of the central questions in tying cases is whether the tying and tied items are separate products. If consumers normally view two functions as one integrated product, tying analysis may be more difficult. If consumers demand the products separately, and if suppliers commonly provide them separately, this supports the existence of two distinct products.

In traditional markets, the separation may be obvious. A printer and printer paper are different products. A car and insurance are different products. A medical device and maintenance services may be separate products depending on market practice.

In digital markets, separation can be more complicated. Software functions may be technically integrated. A platform may argue that payment, logistics or authentication tools are part of one integrated service. Competition analysis must therefore consider consumer demand, technical necessity, commercial practice, separate supply, product functionality and whether the integration is genuinely necessary.

7. Dominance in the Tying Product Market

For Article 6 tying cases, dominance in the tying product market is usually essential. The concern is that customers want or need the dominant product and are therefore forced to accept the tied product.

The Turkish Competition Authority’s digital transformation report emphasizes that developing a tying theory requires establishing dominance in the relevant tying market. The report discusses digital market examples where operating systems, app stores and general search services may create powerful positions due to market shares, network effects, entry barriers and user dependence.

Dominance may arise from market share, network effects, data advantages, switching costs, intellectual property rights, brand loyalty, regulatory barriers or ecosystem control. In digital markets, market share alone may not fully capture power. A platform may have strong market power because users, advertisers, sellers or developers cannot realistically switch without losing access to an ecosystem.

8. Coercion or Commercial Compulsion

Tying usually involves some form of coercion. Customers must take the tied product to obtain the tying product, or they face strong commercial pressure to do so. Coercion may be contractual, technical or economic.

Contractual coercion is clear where the agreement says that product A can be purchased only if product B is also purchased. Technical coercion occurs where product design prevents separate use. Economic coercion exists where separate purchase is technically possible but priced or structured in a way that makes it unrealistic.

For example, if a dominant platform allows access only to sellers who also buy its logistics service, that may be tying. If a software provider technically prevents users from removing a pre-installed application, that may be technical tying. If separate purchase is available but the bundle discount is so large that no rational customer would buy separately, that may raise bundling concerns.

9. Foreclosure Effects

The main competition concern is foreclosure. Tying and bundling may reduce competitors’ access to customers in the tied product market. If customers who need the dominant product are forced to take the tied product, rival suppliers of the tied product may lose sales, scale, data, distribution and investment incentives.

Foreclosure is especially serious where the tied market has network effects or scale economies. Once the dominant undertaking expands the tied product’s user base, rivals may find it harder to reach sufficient scale. This can be particularly harmful in digital markets, where user data, feedback loops and default settings may quickly reinforce market power.

The Turkish Competition Authority’s digital transformation report states that tying and bundling can be especially powerful in digital markets because of economies of scale and scope, low marginal costs, network effects and feedback loops. These features may increase the incentive and ability of dominant digital undertakings to use tying and bundling strategies.

10. Consumer Harm

Consumer harm may occur even if the tied product is initially provided free or at a low price. In digital markets, “free” products may still involve data extraction, reduced privacy, more advertising, weaker innovation or reduced choice. In traditional markets, tying may lead to higher prices, reduced product variety, lower service quality or exclusion of efficient competitors.

In the Google Android analysis, the Authority’s bulletin explained that consumer harm was considered in relation to Google Search becoming widely used on mobile devices, rivals being unable to compete efficiently, users being directed into Google’s advertising algorithms and data ecosystem, and reduced incentives for investment by Google and potential rivals.

This is important because consumer harm is not limited to immediate price increases. It may include reduced innovation, restricted default choice, weaker privacy competition, lower quality or long-term ecosystem lock-in.

11. Objective Justification and Efficiencies

Tying and bundling may be justified where they create real efficiencies. A company may argue that integration improves safety, quality, interoperability, cybersecurity, fraud prevention, user experience, technical performance or cost efficiency.

For example, a platform may require a secure payment system to prevent fraud. A medical device producer may require certified consumables to protect patient safety. A software provider may integrate functions to ensure compatibility. A car manufacturer may bundle certain safety systems because they are technically connected.

However, justification must be objective and proportionate. The undertaking must show that the practice is necessary and that less restrictive alternatives are insufficient. If the same goal can be achieved through certification standards, optional integration, interoperability rules or quality controls, a mandatory tie may be difficult to defend.

In the Google Android matter, the Authority’s bulletin notes that the Board examined justifiable grounds and concluded that the investigated practices were not necessary for the efficiency gains claimed.

12. Tying in Digital Platforms

Digital platforms create strong incentives for tying. A platform may control access to users and require business users to adopt additional services. Examples include tying marketplace access to logistics, tying app distribution to in-app payment systems, tying advertising tools to platform analytics, tying search visibility to paid promotion, or tying seller participation to fulfillment services.

Digital tying is particularly sensitive because platform ecosystems can expand quickly. If a platform controls one gateway service, it can use that gateway to expand into adjacent markets. This can reduce the ability of specialized rivals to compete.

The Turkish Competition Authority’s digital transformation report identifies platform practices where users of one product or service may be required to use another product or service of the same platform, including proprietary payment services or pre-installed services. It also states that, legally, tying and bundling in digital markets are not fundamentally different from traditional tying and bundling, but their potential to harm competition may be greater in digital markets.

13. Tying and Data Power

Data can intensify tying concerns. If a dominant platform ties a secondary service to its core service, it may collect more data across markets. This can improve targeting, personalization, ranking, advertising and product development, further strengthening the platform.

For example, tying payment services to marketplace access may give the platform transaction-level data. Tying logistics may give delivery and consumer behavior data. Tying advertising tools may give visibility into seller strategy. This data can then reinforce the platform’s power and make rival services less competitive.

A data-related tying strategy may therefore harm competition even where the tied product is priced attractively. The long-term harm may arise from data concentration, ecosystem lock-in and reduced innovation by independent service providers.

14. Bundling Discounts

Bundling discounts are not automatically unlawful. A company may offer a package price lower than the sum of individual prices. Consumers often benefit from discounts. However, bundling discounts can become exclusionary where a dominant undertaking uses discounts to make it commercially impossible for competitors selling only one component to compete.

For example, a dominant company selling products A and B may offer a bundled discount so large that customers effectively cannot buy product B from a rival. If the rival cannot match the bundle because it does not sell product A, it may be foreclosed.

The legal assessment should examine whether the discount is loyalty-inducing, whether it forecloses equally efficient competitors, whether customers are locked in, whether the dominant undertaking can leverage power from one product into another, and whether there are efficiency justifications.

15. Pure Bundling vs. Mixed Bundling

Pure bundling is generally riskier when used by a dominant undertaking because customers cannot buy products separately. It can immediately foreclose competitors in the tied product market. Mixed bundling is more nuanced because separate purchase remains possible, but the discount may still create exclusionary pressure.

A dominant undertaking should be cautious with both models. If customers cannot realistically obtain the tied product from rivals because of contractual, technical or economic pressure, the practice may be treated as anti-competitive.

For compliance, companies should preserve meaningful separate purchase options where possible. If separate purchase is available only formally but economically unattractive, legal risk remains.

16. Technical Tying

Technical tying occurs through product design, interoperability limitations, default settings, pre-installation, software integration or hardware restrictions. It is common in digital markets, consumer electronics, vehicles, medical devices and software ecosystems.

Technical integration may be legitimate. Integrated products can improve quality and user experience. However, technical tying becomes risky where integration is not necessary and prevents users from choosing rival products.

For example, a device may include a pre-installed app that cannot be removed. A platform may technically prevent third-party payment systems. A smart device may work only with the producer’s consumables. A vehicle software system may block independent repair tools.

Technical tying should be supported by objective technical reasons. Companies should document why integration is necessary and whether interoperability alternatives were considered.

17. Tying in Aftermarkets

Aftermarkets are important for tying analysis. A supplier may sell a primary product and then tie customers to spare parts, consumables, maintenance or software updates. This may occur in printers, medical devices, industrial machinery, vehicles, software, smart devices and healthcare equipment.

Aftermarket tying may harm consumers who are locked into the primary product. Once the customer has purchased the main product, switching may be costly. The supplier may then exploit or foreclose aftermarket competition by forcing purchases of its own consumables or services.

However, not every aftermarket tie is abusive. Safety, quality, warranty protection, regulatory compliance and technical reliability may justify certain restrictions. The key is proportionality. A supplier should avoid broad ties where certification or quality standards would achieve the same purpose.

18. Tying and Distribution Agreements

Tying may also arise in distribution relationships. A supplier may require dealers to buy slow-moving products together with popular products. A franchisor may require franchisees to buy unrelated services. A manufacturer may require distributors to display or stock another product as a condition of supplying the demanded product.

Article 4 expressly addresses tying in agreements where the purchase of one good or service is linked to another contrary to the nature of the agreement or commercial practices.

Distribution tying may restrict dealer freedom and foreclose competing suppliers. However, some tied purchases may be justified in franchise or selective distribution systems where uniform quality, brand identity or safety requires standard inputs. Again, necessity and proportionality are decisive.

19. Tying and Public Procurement

Tying can also appear in tenders. A supplier may bundle products in a way that prevents competitors from bidding for individual components. Public authorities may also design procurement packages that favor integrated suppliers. Although procurement design is not always a competition law infringement by private undertakings, bid structures and supplier conduct may still raise concerns.

A dominant supplier participating in tenders should avoid using bundled offers to exclude efficient competitors where the buyer could reasonably procure components separately. Public procurement teams should define needs objectively and avoid unnecessary bundling that restricts competition.

20. Merger Control and Conglomerate Effects

Tying and bundling are also relevant in merger control. A merger may combine complementary products and give the merged undertaking the ability and incentive to bundle them. This is especially important in conglomerate mergers involving technology, software, healthcare, consumer goods, payment systems, logistics or digital platforms.

Turkish non-horizontal merger guidance discusses conglomerate effects and explains that a merger may allow the merged undertaking to leverage a strong position in one market into other markets through tying, bundling or other exclusionary practices.

Therefore, tying and bundling analysis is not limited to investigations after conduct occurs. It may also arise prospectively in merger review, where the Board examines whether the transaction may create foreclosure risks.

21. Evidence in Tying and Bundling Cases

Evidence in tying and bundling investigations may include contracts, licensing terms, technical documentation, product design documents, emails, business plans, pricing models, customer complaints, market share data, internal strategy presentations, app store rules, platform policies, APIs, default settings and economic expert reports.

The Turkish Competition Board has powers to request information and conduct on-site inspections. Law No. 4054 allows the Board to examine books, documents and assets, request written or oral explanations, and copy relevant materials during inspections.

Internal documents can be decisive. Statements such as “we will force customers to use our payment system,” “bundle product B to protect it from rivals,” or “use dominance in product A to grow product B” may create serious risk. Conversely, documents explaining technical necessity, consumer benefits and less restrictive alternatives can support a defense.

22. Administrative Fines and Legal Consequences

If tying or bundling violates Article 4 or Article 6, the undertaking may face administrative fines. Law No. 4054 provides that conduct prohibited under Articles 4, 6 and 7 may lead to fines of up to 10% of annual gross revenues, and managers or employees with decisive influence may face personal fines of up to 5% of the fine imposed on the undertaking or association.

The Board may also order the termination of the infringement, impose behavioral obligations, require contract amendments, require unbundling, require changes to default settings, or adopt interim measures in urgent cases. Private damages claims may also follow if business users, competitors or consumers suffer harm.

23. Compliance Program for Tying and Bundling

Companies operating in Turkey should adopt a tying and bundling compliance program, especially if they have strong market positions or operate digital platforms.

The program should include:

Assessment of dominance in core products.

Identification of tied or bundled products.

Review of contractual tying clauses.

Review of technical integrations and default settings.

Assessment of separate product demand.

Foreclosure analysis for tied markets.

Consumer benefit and efficiency documentation.

Legal review of bundle discounts.

Controls over platform access requirements.

Review of app store, payment, logistics and advertising ties.

Training for product, engineering, sales and legal teams.

Merger control review where product portfolios are combined.

Compliance must involve product and engineering teams, not only lawyers. In digital markets, tying may be embedded in product design rather than contract language.

24. Practical Checklist Before Launching a Tie or Bundle

A company should ask:

Are the products separate from a customer-demand perspective?

Do customers have a real choice to buy separately?

Are we dominant in the tying product market?

Does the tie affect competitors in the tied product market?

Could the practice foreclose equally efficient rivals?

Is the bundle discount commercially reasonable?

Is technical integration genuinely necessary?

Is there a less restrictive alternative?

Are consumer benefits documented?

Does the practice affect data access or interoperability?

Could the tie strengthen ecosystem lock-in?

Has legal review been completed before launch?

If these questions raise concerns, the practice should be revised before implementation.

25. Practical Defenses

A company accused of unlawful tying or bundling may argue that the products are not separate, that there is no dominance, that customers are not coerced, that competitors are not foreclosed, that consumers benefit, or that objective justification exists.

Strong defenses require evidence. The company should provide market data, consumer demand analysis, technical explanations, safety justifications, cybersecurity reasons, cost efficiencies, quality improvements, user experience benefits and proof that separate purchase remains meaningful.

A defense based only on general business preference is usually weak. The justification must be specific, documented and proportionate.

Conclusion

Tying and bundling practices under Turkish Competition Law require careful legal and economic analysis. These practices can be efficient and beneficial where they improve product quality, reduce costs, enhance technical integration or create consumer value. However, they may violate Article 4 or Article 6 of Law No. 4054 where they restrict competition, foreclose rivals or allow a dominant undertaking to leverage market power from one market into another.

Article 4 expressly addresses tying in agreements where the purchase of one good or service is linked to another contrary to commercial practice. Article 6 captures tying and bundling as abuse of dominance where a dominant undertaking uses such practices to prevent entry, complicate competitors’ activities or leverage market power.

The Google Android decision provides a practical Turkish example of modern tying analysis. The Board examined separate products, bundling, dominance in the tying market, foreclosure effects, consumer harm and justifiable grounds, ultimately finding that certain Google practices violated Article 6 by transferring dominance from licensable mobile operating systems into mobile search services.

Digital markets make tying and bundling especially important. Network effects, feedback loops, low marginal costs, data accumulation, default settings and ecosystem lock-in may increase both the attractiveness and competitive harm of tying strategies. The Turkish Competition Authority’s digital transformation report confirms that these practices may have greater potential to harm competition in digital markets than in traditional markets.

For companies operating in Turkey, the safest approach is proactive compliance. Tying and bundling strategies should be reviewed before implementation. Separate product demand, dominance, customer choice, foreclosure effects, objective justification and consumer benefits should be documented. Platform rules, payment obligations, logistics requirements, default settings, technical integrations and bundle discounts should be examined carefully.

A well-designed compliance program allows companies to create innovative product packages while avoiding exclusionary practices that may trigger Turkish Competition Authority investigations, administrative fines, behavioral remedies and private damages claims.